Dec 6 (Reuters) - U.S. stocks fell on Thursday as the arrest of a top Chinese technology executive stirred fears of fresh tensions between the United States and China over trade, although Wall Street’s main indexes reduced steep losses from earlier in the session.

Stocks resumed their slide after a rare midweek U.S. trading holiday, while a drop in oil prices also hit the energy sector , which was the worst-performing major S&P 500 group.

The chief financial officer of telecom equipment maker Huawei Technologies was arrested in Canada and faces extradition to the United States.

The arrest comes as investor enthusiasm had already faded following a truce reached over the weekend in talks between the United States and China, which had prompted some hope about resolving differences over trade that have clouded the stock market’s outlook this year.

“Clearly, the Huawei CFO arrest was the individual catalyst that caused today’s moves lower,” said Mark Hackett, chief of investment research at Nationwide.

“It clearly gives voice to the bears who are saying, ‘There are no real details around this China deal, and we don’t have any specific promises by the Chinese,’” Hackett said.

With Thursday’s declines, the S&P 500 slipped back into negative territory for 2018.

The Dow Jones Industrial Average fell 458.31 points, or 1.83 percent, to 24,568.76, the S&P 500 lost 39.35 points, or 1.46 percent, to 2,660.71 and the Nasdaq Composite dropped 53.04 points, or 0.74 percent, to 7,105.39.

However, by afternoon the indexes had climbed off their lows from earlier in the day.

Stocks had fallen to near levels seen in October and November, Hackett said.

“The bounce off of that low is encouraging,” he said.

Aside from trade, concerns over bond yields and interest rates have pressured the stock market in recent days.

U.S. Treasury yields tumbled, with 10-year yields hitting three-month lows as traders scaled back expectations on the number of rate hikes the Federal Reserve would implement amid weakening economic data and market volatility.

Financial shares, which are sensitive to bond yield swings, fell 3.2 percent and were the biggest declining major group following energy.

Losses for the S&P 500 were mitigated by gains for Amazon , Netflix and some of the other technology and internet stocks that have been hit particularly hard during the market’s pullback in recent months.

The major indexes fell more than 3 percent each on Tuesday. Markets were closed on Wednesday for a day of mourning for former President George H.W. Bush, who died on Friday.

Declining issues outnumbered advancing ones on the NYSE by a 3.25-to-1 ratio; on Nasdaq, a 2.28-to-1 ratio favored decliners.

The S&P 500 posted 4 new 52-week highs and 70 new lows; the Nasdaq Composite recorded 8 new highs and 351 new lows. (Additional reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila and Dan Grebler)